PegNet-a stabilized token with multiple assets using the Factom Protocol | Altcoin Buzz Review

in informationwar •  4 months ago 

Pegnet Overview

review

PegNet is a decentralized network of tokens that are not associated with storage, tied (stabilized) to a set of market assets and values. These assets can include currencies, precious metals, stocks, stock indexes, and so On. the PegNet Network allows you to trade and convert value without the need for counterparties. PegNet is built as a FOM (Factom Asset Token) standard on top of the Factom Protocol.

 

About PegNet

PegNet was created by members of the Factom and Ethereum community in August 2019. It is a fully decentralized, verifiable, stable, open source coin network that uses pow consensus and external oracles to merge currency and asset prices. Anyone can contribute to the main code and run a miner on the PegNet network.

PegNet's current assets include 15 major currencies, 2 metals, and 14 cryptocurrencies. To get the full list, contact here . Each of these assets stands separately as a cryptocurrency token on the market and is designated by the leading letter "p". For example, pUSD is linked to the US dollar. PegNet uses a simple game theory in which a set of linked tokens reinforce each other by holding their mutual bindings.

Pegnet's own token (PEG) sums up the cost of a set of marked-up tokens on the market (only at the Protocol capitalization stage). After PEG is set on exchanges, exchanges will set the value of PEG.

Problem statement

The problems that the cryptocurrency payment industry usually faces are listed below:

Conversion between assets is not possible : reserve assets do not support conversion between assets. The user is limited by the liquidity of reserve assets held on the exchange. 

Price instability: cryptocurrency for payments has encountered obstacles to implementation due to price changes, lack of liquidity, difficulties with payment reports, currency risks, etc. 

Complex process . Complex usage processes and high transaction fees have contributed to low adoption of digital assets.

Stability mechanism: smart stable coins based on contracts are largely decentralized, but include leveraged contracts that provide stability through liquidation when market pressure leads to lower asset prices.

PegNet Solution

The PegNet network provides a mechanism for managing payments, Treasury allocation, risk reduction, arbitration, and budgets in different jurisdictions without requiring expensive and slow processes from external parties such as financial institutions, payment processors, exchanges, and so On. Let's look at some of the advantages:

Conversion between assets: only PegNet provides conversion between linked assets. This is the main USP of PegNet.

Exposure to any of the listed assets: PegNet allows users in their wallets to select their exposure to any of the listed asset values. In addition, users (sellers and customers) can make payments in any of the real-world currencies without having to resort to third-party services, such as exchanges and payment systems.

Removal of complex processes . The linked token network provides a mechanism for managing payments in different jurisdictions that circumvent the slow and expensive processes associated with external third parties. 

Low fees : transaction costs are about 1/10 of a cent, making them ideal for microtransactions.

Stability mechanism: PegNet offers a different price stability mechanism through arbitrage. This requires one of PegNet's assets to be liquid. Gradual adoption will tell us whether this mechanism will work. Read more here.

Other features include:

High throughput

Secure data entry that integrates easily with existing systems

Efficient, consistent data publishing.

Technologies

PegNet is a second-level application on top of Factom. This means that the availability and immutability of data is ensured using the "Proof of authority" consensus model of Factom.

The blocking time is 10 minutes (the blocking time of the Factom Protocol, on top of which PegNet is built).

To date 378 609.8 of the total FCT has been converted

PegNet provides a static reward of 5000 PEG per block. This award is distributed evenly among the top 25 ORS.

There are no half or other reduction mechanisms for getting block rewards. 

Oracle: Oracle is what determines the exchange rates used in a particular block. The process is a continuous cycle with one cycle lasting ten minutes. 

Rating: the Rating selects the top 10 OPR-Oracle Price Records ("best" means the closest to the true exchange rate). These winners set prices for this block. 

Create: Create an OPR by collecting currency exchange data and combining it with the list of winners that we will send.

Mining: mining allows the network to find a one-time number for OPR, which has a high complexity.

Write: Write the oprs you want to send to the Factom flowchart before the end of the block so that they can be classified in the next block.

Proof of work

PegNet is working on a Mining Proof of Work algorithm to achieve consensus. It uses a native hash called LXRHash, which is designed to be GPU-and ASIC-resistant. The block duration is determined by the 10-minute blocking time of the Factom Protocol, so it cannot have a predetermined minimum complexity. It is not guaranteed that a certain threshold will be reached during mining. 

In PegNet, there is an increase in the hashrate, with the current hashing rate of 914.5 MH / s.

Price stability through arbitration:

As soon as pAssets start being listed on exchanges, their price outside of PegNet will change. PegNet is intended for the use of arbitration as a mechanism of stability in the exchanges. More information is available here .

Conclusion

The PegNet project is relatively new and takes time to gain momentum. Currently, there are very few real implementations and examples from practice.

The PegNet method for achieving price stability for linked assets on exchanges consists of arbitration. However, this requires that one of PegNet's assets be liquid on the exchange so that arbitrage purchases at cost can be converted into a liquid asset and then sold for profit. Until the market creates a good unplanned scenario, there is a risk that the price will remain unstable. This problem will disappear with adoption, and PegNet has the potential to become a major one.

In addition, it costs money to submit an ORS. The OPR byte size is less than 1 KB, which is exactly one input credit to send. One entry credit can be purchased for the equivalent of $ 0.001. There can be no more than 144 directory blocks in a 24-hour window.

PegNet also needs to address liquidity by listing on large (high volume) exchanges and multiple exchanges.

To say that the USP of inter-conversion conversion is unique and requires special mention. PegNet is the flagship in this area. The nature of PegNet and its lack of a counterparty open up new implementations for the cryptocurrency industry, such as simplified settlement of smart contracts and new Dex liquidity mechanisms.


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